LONDON (Alliance News) - Braveheart Investment Group PLC Monday said it swung to a GBP807,522 loss in its last financial year from a GBP67,570 profit a year earlier, as it bore the pain of losses on the sale of underperforming corporate finance business Envestors, though the group did record a profit from continuing and discontinued operations in the second-half.
In a results statement for the year ended March 31, Braveheart, which provides financing to small and medium sized enterprises and holds investments in early-stage technology companies, said that its return to profitability in the second-half was largely due to the Envestors disposal to a management buyout team. The group made a GBP38,000 profit from continuing and discontinued operations in the second-half, after making an GBP845,000 loss in the first.
Chief Executive Geoffrey Thomson said the group experienced good performance and output from its fund management business in the financial year. He also noted "steady progress" with the group's directly held portfolio and said that market sentiment for realisations is improving, "with some weighty valuations for early stage technology company acquisitions being seen in the public markets."
"The financials show a disappointing first half [...] but we returned to profitability in the second half. The business is now less volatile and current year's trading is more consistent with what we saw in the second half of last year," Thomson said in a statement.
But the group, which is headquartered in Perth, Scotland, also is operating against the backdrop of the nation's looming independence referendum on September 18.
"From my point of view, if there is a 'yes' vote there will be far-ranging consequences for the financial services industry in Scotland," Thomson told Alliance News in an interview.
"I think we'll see capital flight immediately, falling property prices ? an exodus to England ? and considerably higher taxes, because if oil revenues are not as high as the Scottish National Party says they will be, the only way to make up for that is by decreasing public expenditure or by raising taxes. And I think raising taxes is the easier option," Thomson said.
His remarks come on the same day as UK Parliament's Scottish Affairs Committee published a report dismissing any possibility of a currency union between the UK and a separate Scotland. The committee said that no present or future Chancellor or government could enter into a currency union without "totally destroying both their political and economic credibility".
The Braveheart CEO said that the currency question is particularly important for the financial services industry.
"A 'yes' vote would certainly increase operating costs [for Braveheart] in the case that a different currency is adopted," Thomspn told Alliance News.
Although a Scottish company, Braveheart has significant assets under management based in England and Ireland, and Thomson remains hopeful that a vote in favour of independence will be avoided.
"Emotionally, people would like independence, but it doesn't make common sense," the CEO told Alliance News. "I think people need to vote with their minds and not with their hearts."
"Our lease is up next May so it's in the balance as to what we will do if there's a 'yes' vote," Thomson added.
Braveheart shares were Monday quoted up 4.8% at 11.00 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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